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Take a Step Closer for an Invitation to Shop

LIKE many retailers, the North Face has been having trouble luring shoppers into its stores. The company, which sells outdoor apparel and gear, is about to try a new tactic: sending people text messages as soon as they get near a store.

Advertisers have long been intrigued by the promise of cellphones, because they live in people’s pockets and send signals about shoppers’ locations. The dream has been to send people ads tailored to their location, like a coupon for a cappuccino when passing a coffee shop.

Despite the hype, few cellphone owners have received such ads. This year, that may change, analysts say, as companies like the North Face embrace location-based mobile ads.

“To be that close to the actual sale or physical location is such a value for marketers, and something they’ve been looking for out of mobile for a long time,” said Paul Gelb, national manager of emerging media at Razorfish, the digital advertising agency that is part of the Publicis Groupe.

The North Face’s new campaign, which starts this month, is its first to single out customers depending on where they are physically.

The campaign was created by Placecast, a location-based mobile ad company in San Francisco. It uses a practice called geo-fencing, which draws a virtual perimeter around a particular location. When someone steps into the geo-fenced area, a text message is sent, but only if consumers have opted in to receive messages.

“You say, ‘This is a brand I care about,’ and then you go about your day and your phone tells you when something is interesting,” said Alistair Goodman, chief executive of Placecast.

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This month, the North Face is beginning its first campaign aimed at customers based on where they are physically. Shoppers in and around New York, San Francisco, Seattle and Boston may receive text alerts when they and their cellphones are close to stores.

Placecast created 1,000 geo-fences in and around New York, San Francisco, Seattle and Boston, cities where the North Face has many stores and areas that get a lot of snow or rain, so the company can tailor its messages to the weather. In urban areas, the fences are up to half a mile around stores, and in suburban areas they are up to a mile around stores.

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For now, the North Face will send texts about promotions, like a free water bottle with a purchase, and new arrivals, because the company’s gear is heavily seasonal. A text message would say, for example, “TNF: The new spring running apparel has hit the stores! Check it out @ TNF Downtown Seattle.”

The North Face plans to eventually send branded texts when people arrive at a hiking trail or mountain to alert them about weather conditions or logistics for a ski competition, for example. It also created an iPhone app called the North Face Snow Report that provides snow conditions and trail maps.

“We like things that people opt in to and that aren’t going to be perceived as being intrusive, where we’re bringing something to the table,” Aaron Carpenter, vice president of marketing for the North Face, said.

That type of brand advertising via text message — as opposed to sending a call to action, like a coupon — is new, said Mr. Gelb of Razorfish.

“All of our highly brand-conscious clients were reluctant about text messaging because there was not as much of an engagement or sexiness to it,” he said. “But here, when you have such relevance, it connects to a person’s passions.”

Razorfish, which is not involved in the North Face campaign, is working on campaigns with Placecast for five brands. It is signing up customers to receive the texts now and will start the campaigns around back-to-school time and the holidays.

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In other uses, restaurants could text people leaving a concert, Mr. Goodman said. Location is a memory trigger, he said, so even if people do not visit a shop when they get the text, they may remember it next time they are nearby.

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To determine a cellphone’s location, Placecast uses techniques including a phone’s GPS signal, location data provided by carriers to companies that sell it to Placecast and information gleaned from triangulating the phone’s distance to cell towers.

But shoppers should not expect all of their favorite brands to suddenly send alerts as they walk through town. According to Forrester Research, advertisers spent just $391 million on mobile last year — only 1.5 percent of what they spent on interactive advertising as a whole — and location-based ads were just a small portion of that.

They are projected to spend $561 million on mobile this year and $1.3 billion by 2014. Mr. Gelb said that this year, mobile was part of nearly every client’s campaign.

“It’s still nascent, but it has a lot of potential,” Julie A. Ask, a vice president and mobile analyst at Forrester, said. “Being contextual and personal is the holy grail of mobile, and location is one of those aspects. But the mechanics of how this is going to work and how effective it’s going to be get a bit murky.”

Mobile ads are promising because they are highly personalized, but that intimacy also means the bar is higher for the ads to be well done and relevant, Ms. Ask said. Placecast sends a maximum of three texts a week to avoid annoying people, Mr. Goodman said. During a campaign last year, 6 percent of people opted out.

In addition to the mobile ads, the North Face sponsors sporting events, and runs print ads in outdoor and sporting magazines with images from its sponsored athletes’ competitions, as well as outdoor and Web ads. It will run its first TV ads this year in three cities.

“When we surround somebody with media during those key seasons is when we get the best results,” Mr. Carpenter said.

A version of this article appears in print on February 23, 2010, on page B4 of the New York edition with the headline: Take a Step Closer For an Invitation to Shop. Order Reprints|Today's Paper|Subscribe